Three people have been killed after the police fired on a group of protesting farmers on a highway in western India.

More than 20 policemen were injured in the clash which took place on the highway connecting the cities of Mumbai (Bombay) and Pune on Tuesday.

The farmers were protesting against the proposed diversion of water from a local dam to factories in the area.

The police said it fired after protesters turned violent and refused to lift the blockade.

Reports said that thousands of farmers had gathered on the busy highway to protest the planned "diversion of water" from the nearby Pavana dam to the industrial township of Pimpri-Chinchwad.

The farmers say there would be a scarcity of water for farming and drinking once the proposed pipeline cutting through farmlands is built to supply water to the factories.

They also fear that their land would be acquired by the government to build the pipeline.

The police said the protest became violent after a meeting of the protesters on the highway.

"After the meeting got over, they started hurling stones at policemen and damaging police van. We had decided not to use force but when the farmers got violent we had no option but to open fire," police officer Sandeep Karnik was quoted as saying by The Hindu newspaper.

The Pune demonstrations are in a series of protests in the country over attempts to acquire land for industry or infrastructure development.

In May two policemen and a farmer were killed in northern Uttar Pradesh state after protests against land acquisition by the government turned violent.

In August 2008 at least four farmers were been killed and 50 others - including policemen - injured in clashes in a suburb of the capital Delhi.

The farmers were demanding compensation for land brought by the government.

Correspondents say acquisition of land for the expansion of cities and industrialisation in India has become a very sensitive issue as about 65% of the population is dependent on farming.

According to law, government can requisition any private land for a "public purpose".